BlockFi gives more details on the FTX purchase possibility and said that it reached an agreement with the exchange so let’s read more today in our latest cryptocurrency news.
The two parties updated the previous terms as now fix will raise the revolving credit facility to $400 million and the exchange has the option to acquire Blockfi for $240 million. The lender was among the struggling companies in the industry after the massive market crash and one of the first measures was to lay off 20% of its staff. It seems the worst is yet to come as the company announced getting a $250 million evolving credit facility from the exchange a few weeks later. This type of loan allows the receiver to withdraw money and use it to fund the operations, repay it and withdraw again.
The reports emerged that FTX will step up the engagement and purchase BlockFi for $25 million which is much lower than the lender’s announced valuation of $3 billion. The BlockFI CEO Zac Prince denied this amount. Prince published a new company message informing that both parties reached an agreement on how to proceed. FTX increased the revolving line credit facility to $400 million and the exchange has the option to acquire BlockFi at a price of $240 million based on the performance but the release didn’t provide a minimal price.
Blockfi gives more details and said it hadn’t withdrawn any of the funds from the credit facility but aside from the markets drawback, it blamed the situation on the Celsius NEtwork and Three Arrows Capital:
“Crypto market volatility, particularly market events related to Celsius and 3AC, had a negative impact on BlockFi. The Celsius news on June 12th started an uptick in client withdrawals from BlockFi’s platform despite us having no exposure to them.”
As recently reported, BlockFi and FTX agree on the acquisition terms but also made a deal for a revolving line of credit. The deal represents a total value of $680 million Zac Prince, the CEO of BlockFi added. The option to acquire Blockfi at a price of $240 million is also on the table. The deal came amid rumors that FTX will acquire Blockfi for $24 million and Price denied those rumors but the struggling crypto lender now signed a term sheet with FTX US which leaves the room open for acquisition.
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